Does Sequential Innovation Decline in the Presence of Large Patent Portfolios? Examining Future Variety Creation in the U.S. Agricultural Biotechnology Industry

Abstract:     
This paper examines the effect patent ownership has on firm variety creation in the U.S. agricultural biotechnology industry. Counts of new varieties include corn, soybean, or wheat varieties protected by either patents or plant variety protection certificates by firms in the years 1976-1999 and are modeled as a negative binomial variable. Although firms with larger patent portfolios create more varieties, firms do not experience scale economies in the production of new varieties through increased numbers of patents. Further, firms that have a greater diversity of technology in their portfolios create significantly more varieties. Meanwhile firms experience positive spillover effects from rival firms' patents, but these positive spillover effects lessen after 1990.

Keywords: sequential innovation, agricultural biotechnology patents, plant variety protection

JEL Classifications: O31, O34, Q16

Working Paper Series